City to vote on deal to sell, redevelop historic bank building

Gastonia leaders on Tuesday will consider offering a six-figure grant as part of a deal to sell and redevelop a historic downtown bank.

City Council members will hold a required public hearing during their regular meeting and allow local residents to weigh in on the proposal for two buildings that make up the former Citizens National Bank at 212 W. Main Ave. If approved, the contract would be another key step toward the likely purchase of the property by Tom Cox and Jim Morasso, two existing downtown business owners who want to expand their influence there.

Five months have passed since City Council members endorsed a vision for redeveloping the bank offered by Cox and Morasso through their company, CNB 1920 LLC. They voted 5-1 in June to continue hammering out a firm deal with the two, and negotiations since that point have been extensive, with some tweaks to the original proposal.

Cox owns the Standard Hardware building on South Street, where he maintains the office and showroom for his Charlotte Cabinetry business. Morasso owns Webb Custom Kitchen in the historic Webb Theater, which he bought from the city a couple of years ago through a similar redevelopment contract.

The partners plan to convert the four levels of the historic bank into a downtown destination that could reap rewards for the city. It involves creating new retail space for some type of ground-floor common market, upstairs studios for working artists, and a Thermador cooking school for average Joes who want to better learn their way around a standard kitchen.

Breaking it down

The contract to be considered Tuesday would involve CNB 1920 buying the bank for $324,800, and making an initial deposit of $16,240. The city would finance the purchase over a period of six years at 3.75 percent interest.

In addition to buying the building for $324,800, Cox and Morasso would also commit to making an additional investment of $1.8 million in the property, all within three years of the closing date.

From its end, the city would offer a three-year grant based on expenditures resulting from the project, such as utility revenues, tap fees and permits. The city’s calculations estimate that grant will end up being approximately $270,855.

The city would only make the grant payments on a quarterly basis, as CNB 1920 meets specified benchmarks for investing the additional $1.8 million into the property. For example, the developers would have to have invested $500,000 by the end of year one, and $750,000 by the end of year two.

The council’s approval Tuesday would set in motion a 10-day upset bid process, during which other candidate buyers could step in front of CNB 1920 by offering a purchase price at least 10 percent higher. But based on the terms of the city’s approved redevelopment contract, any upset bidders would have to agree to develop the property exactly as CNB 1920 already has, including specifics such as the creation of the art studios and cooking school.

Once the 10-day upset bid process passed, the city would finalize the contract with CNB 1920, which would begin the closing process.

New-tax payback

The city has leased space for several years at 212 W. Main Ave. to the Gaston County Art Guild. It has served during that time as the home to Arts on Main, which consists of a number of art studios that are leased to working artists at affordable rates.

The contract would provide for the Art Guild and Arts on Main to remain at the property for at least three years under their existing lease rates. Afterward, a new deal would have to be struck, though Cox and Morasso believe they would be a natural fit for what is planned on the second level.

The contract would also require the redevelopment to create 15 permanent, full-time jobs that pay at or above the median retail employee wage for Gaston County.

Bombardier said the estimated $270,855 city grant will make it easier for Cox and Morasso to put that money into the redevelopment on the front end. But factoring in the increased property and sales taxes that are anticipated as a result of the redevelopment, the city should earn its money back quickly, he said.

“When you factor in an additional $1.8 million in improvements, that increases the tax value of the property,” he said. “From a numbers standpoint, we foresee a payback within five years, plus or minus a couple of months.”

You can reach Michael Barrett at 704-869-1826 or on Twitter @GazetteMike.

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